"Recently, startups have managed to raise tens of millions of dollars—occasionally in mere minutes, and sometimes without an actual product attached—on the cryptocurrency and app platform ethereum."

'On Tuesday, the SEC announced that tokens that are sold off in crowdfunding events known as Initial Coin Offerings (or ICOs) in ethereum may be considered securities in some circumstances, and are therefore subject to US securities law.

'Tokens are digital assets that investors may purchase during ICOs, and they usually have some sort of bespoke functionality—in some cases, voting rights or profit dividends—in the app the investor is buying into.'